Workplace laws to blame if housing targets not met, industry group says

Compliance burdens, unnecessary complexity, and unfit workplace legislative frameworks are undermining the nation’s efforts to address the housing crisis, an industry body has argued.

In its submission to the Closing Loopholes Review and the National Employment Standards Inquiry, the Housing Industry Association (HIA) outlined the apparent detrimental effects of current workplace laws on the housing industry. The representative body took issue with several proposed reforms across the review and the inquiry, arguing that they are incompatible with the unique operational model of residential building and will create greater harm.

The HIA warned that reforms within the Closing Loopholes Acts have failed to meet their objectives, harming productivity within the sector.

As explained by the body’s senior executive director of compliance and workplace relations, Stuart Collins, “these changes overturn the High Court’s 2022 clarity on contractor status and expose genuine subcontracting to misclassification as labour-hire avoidance. That threatens the operational model that delivers two-thirds of Australia’s homes.”

Collins also highlighted how this fostered a sense of uncertainty and increased risk, stating: “The reforms also expand union access and enforcement powers without corresponding accountability, at a time when the industry is trying to deal with the documented unlawful conduct by the CFMEU.”

He added that “civil penalties for building have increased to $939,000 per breach, with no scaling for business size”.

The HIA also outlined how the framework of the National Employment Standards (NES) contradicted its own objectives. The “one-size-fits-all” model, it argued, isn’t scaled for a sector that consists of 97 per cent small businesses and relies on an 80 per cent independent contracting model.

This also applied to the project-based and weather-dependent nature of operation. Collins criticised how the sector “is bound to standards designed for a generic office or factory workforce”, adding: “It simply does not fit.”

He said: “Everything HIA warned of when the Fair Work Act commenced has now occurred. More complexity, lower productivity, higher dispute risk, and small builders unable to grow despite record demand for housing.”

Collins also referenced the current compliance burden under the Building and Construction General On-site Award 2020, stating: “Calculating pay can involve up to 12 variables per day. Under the new criminal wage theft laws, an inadvertent error can be a criminal offence.”

“No comparable system criminalises complexity mistakes.”

Summarising its stance on current employment laws, the HIA purported that the sector’s ability to address the nation’s housing crisis is being undermined. Collins said: “If Australia’s 1.2 million homes target is not met, it will be in part due to the country’s workplace laws.”

In addition, he outlined that “the surge in Fair Work Commission matters – which president Justice Adam Hatcher has described as ‘unsustainable’ – is further proof of a system creating, rather than resolving disputes”.

The submission made several recommendations: a presumption of independent contractor status for ABN-verified and licensed residential trade contractors, a sector-specific employment standards framework, amendments to the criminal wage theft laws, rebalanced right-of-entry and sham contracting tests, size-scaled civil penalties and caps for small businesses, and a mandatory small-business impact test for future reforms.

Collins said: “The most effective corrective action – short of the repeal of the recent reforms – is the establishment of a separate legislative treatment and explicit statutory carve-outs for the residential building sector.”